This work has been funded under the AFOSR Grant no. F49620-03-1-0011 and Army Research Lab contract no. DAAD17-02-P-0398 and DAAD 19-01-1-0742. Two-point distribution functions are used here as to introduce "Microstructure Sensitive Design" in two-phase composites. Statistical distribution functions are commonly used for the representation of microstructures and also for homogenization of materials properties. The use of two-point statistics allows the composite designer to include the morphology and distribution in addition to the properties of the individual phases and components. Statistical continuum mechanics is used to make a direct link between the microstructure and properties (elastic and plastic) in terms of these two-point statistical functions. An empirical form of the two-point statistical function is used which allows the construction of a composite hull. Two different composites (isotropic and anisotropic) are considered and the effect of anisotropy for the prediction of the elastic properties is discussed.